Investors in real estate have likely seen a trend in the way properties are described. Rather than listing a property as simply “high-end,” the term “luxury” has begun to permeate every level of every market. When half the properties available are suddenly marketed as ”luxury,” the meaning of the word begins to melt away; now, seeing a “luxury” real estate posting is as common as postings themselves.
Luxury real estate is defined differently across markets; property values, median resident income, and area development changes significantly depending on the metro area. Knowing how your market defines high-end properties will allow you to better understand he qualities you need and want in a home—as well as what you can market as “luxury” while selling.
So, where does luxury begin? In many large U.S. cities and metro areas, the typical luxury price point is around $1 million. Anything over that is considered to be a luxury property. However, in places like New York City, which attracts a high number of foreign investors, $4 million typically becomes a cutoff point. Similarly, luxury real estate agents are typically defined as those performing in the top 10 percent of their given market. In many smaller cities, that top 10 percent can easily be below $1 million; estate sales are relative to what is selling nearby. But regardless of whether the property is $1.1 million or $11 million, the purchasing process is slightly different.
While defining luxury by the numbers is relatively easy, understanding that makes a home “luxury” is a bit more difficult. There is no checklist for labeling properties, though many features are common among upscale U.S. properties. Prime location, high-end appliances, and customized closets, fitness centers, and spas are often staples in luxury buildings. Of course, this is all relative to the market; in New York City, luxury amenities like doormen are common in study and one-bedroom condos, but they already sell for around $1 million. When determining what is luxury, it is essential to look around you—not just into the home.